The supply chain business is a well-oiled machine. It needs many parts that work together to run properly. From obtaining the raw materials to the distribution of the final products, logistics play an important role in the business. Transportation is just one part of the chain. What matters is the thinking and application of different models in existence that suits the business demand.
Best supply chain models provide the best logistics results. It makes the business delivery efficient. There are two types of supply chain categories, which are:
- The ones that are focused on efficiency
- The ones that are focused on responsiveness
There are seven types of supply chain models that businesses can choose from. They are:
- Continuous flow model
- Fast chain model
- Efficient model
- Agile model
- Custom configured model
- Flexible model
- Supply chain operations reference (SCOR) model
The Seven Supply Chain Models
As we’ve learned, each supply chain model has a different purpose according to the situation demands. It can be dependent on the product, service, or the customers. Let us see what makes the models more productive in business.
#1. Continuous Flow Model
Built for continued, scheduled delivery of goods and services, the continuous flow model ensures the vendors have items stocked always. This model is best for products that have a steady demand – no matter the season or market conditions.
#2. Fast Chain Model
The fast model suits those businesses that produce products that are trending and has shot sales or market lifecycle. It depends on the popularity of the said product for a period of time and will be replaced by other products once the demand is lost. Seasonal products can be considered in this category.
#3. Efficient Model
Best suited for businesses that are in high competition and high efficiency, the efficient model helps gain a competitive advantage in the market. It focuses on proper inventory management and maximized output from production, along with reduced costs and efficient logistics infrastructure.
#4. Agile Model
The agile model consists of four parts – virtual integration, process alignment, a network base, and market sensitivity. Fit for businesses that have a high degree of demand variations, the agile model is a combination of these four parts to ensure the business is ready to tackle any changes in the market.
#5. Custom Configured Model
Customizable products are always in demand in the market. The custom configured supply chain model combines a continuous flow model and agile model to meet the demand of the customers with multiple product configurations at the same time.
#6. Flexible Model
The flexible model best suits manufacturers that have fluctuating demands. To compensate for both the high or low demand from the production side, this model consists of three sections that work together – part segmentation, accurate stocking algorithms, and flexible planning. By implementing partial automation on the manufacturing floor, the business can control what is produced in season or offseason without affecting the overall sales.
#7. SCOR Model
SCOR business model is more or less the monitoring model where the logistics part is observed to assess waste, establish standards, and improve the supply chain management systems. By dividing the supply chain business into different parts, the SCOR model helps in micromanaging the system and helps in strategic decision making.
What’s Your Supply Chain Model?
The above-listed supply chain models are all part of the logistics’ commonly used business models. It all depends on what your business requires.
Let us know what your supply chain business model is and your valuable comments.